CTA's Ventra debit option rife with fees

March 20, 2013|By Jon Hilkevitch, Chicago Tribune reporter

Ventra vending machines stand ready at a CTA station in preparation for the cards’ debut this summer. A Tribune analysis shows that those who enroll in the Ventra card’s debit option for retail purchases are subject to fees including a dormancy fee for not using the card and a fee for calling customer service. (Heather Charles, Chicago Tribune)

A long list of convenience fees and other unexpected charges awaits CTA and Pace Ventra fare-card customers who sign up for an optional prepaid debit card account, a Tribune analysis of the more than 1,000-page CTA contract reveals.

The agreement the CTA reached with its private-sector partners looks like a good one for the perennially cash-strapped transit agency, which will receive a continuous stream of nonfare revenue generated by the host of debit card fees.

But for prospective Ventra customers who are thinking about accepting the offer of a MasterCard prepaid debit account to make retail purchases on the same Ventra card they use for transit fares, it will be vital to closely read the legal jargon in registration documents to avoid costly surprises, consumer experts warn. The Ventra debit card fees have not been previously disclosed by the CTA and Pace.

Ventra debit customers who fail to do their homework will likely be unaware that the charges can quickly pile up — until they see their account statement, which carries a $2 fee if a paper copy of transactions is requested, according to the Ventra contract.

Disputing the charges could get expensive, too. Card owners are subject to a $10-per-hour "Account Research Fee.'' That's on top of a $2 fee for making a phone call to Ventra's customer service center, which is classified as an "Operator Assisted Telephone Inquiry.''

"It's always the case that the big print giveth and the small print taketh away,'' said Steve Bernas, president and chief executive officer of the Chicago region's Better Business Bureau. "Consumers need to read it all ahead of time and determine whether the Ventra debit card is right for them."

Financial experts said these types of fees, and the amounts charged, are fairly typical across the debit card industry. CTA officials said the Ventra prepaid debit account fees are in the middle of the pack and in some cases lower than other debit cards.

What's novel here is that when Ventra launches this summer, the CTA and Pace are expected to become the first U.S. transit agencies to offer a dual transit-debit card.

Public anger over the myriad fees could be directed at the two transit agencies, one expert said.

"The CTA is kind of sticking their neck out if people perceive this product as predatory,'' said Linda Sherry, director of national priorities for Consumer Action, a nonprofit consumer education and advocacy group. "Why should public transit agencies be involved in making interchange fees off people? These are supposed to be public-serving agencies, and a fee-laden card isn't exactly a public service.''

CTA and Pace riders will have the option of signing up for a Ventra transit card only — without the prepaid debit card that could incur fees.

Those debit account fees, the CTA contract states, are subject to change "from time to time,'' indicating the likelihood of escalating charges as well as more money rolling in for the CTA and the private companies involved.

In addition to the $5-a-month "dormancy fee'' that the CTA board approved last week — to be charged to Ventra transit-fare accounts that are inactive for 18 months — the prepaid debit side of the card will be charged $2 a month after 18 months if no retail purchases or money transfers into the account are made, officials said. Cardholders could face an account hit totaling $7 a month.

Ventra debit account customers will also be charged a $2.95 "Reload on Internet'' fee each time they add money to the retail side of Ventra cards using a personal credit card. The $2.95 fee is not charged if a credit card is used to purchase transit fares or passes, officials said.

Use your Ventra debit account to withdraw cash at an ATM? A $1.50 service fee will be tacked on, regardless of where you do your banking. The CTA's banking partner in the Ventra system is MetaBank, a specialty financial institution.

If you are a Ventra customer who becomes fed up with all the ancillary charges and want out, or say you simply move to North Dakota and don't need a CTA Ventra card anymore, you will be assessed a $6 "Balance Refund Fee'' to receive a check in the mail for the remaining money on your Ventra account — minus the $6.

CTA officials said they are not promoting or pushing the debit card on anybody.

"First and foremost, this is a transit contactless reloadable fare program. It is 100 percent optional to sign up for the retail side of the card,'' said Eric Reese, CTA revenue director.

Some riders will decide not to use any type of Ventra card when it is introduced this summer and CTA and Pace begin to phase out existing fare cards through early 2014. Personal credit cards with the most up-to-date technology, called radio-frequency identification, will also be accepted as fare payment and to purchase multiday passes, and no convenience fees will be charged, officials said.